PotashCorp Reports Fourth-Quarter Earnings of $0.26 per Share

Fourth-quarter earnings of $0.26 per share1; full-year 2013 earnings of $2.04 per share

Fourth-quarter results included $60 million in severance-related costs
from workforce reductions

Cash flow from operating activities totaled $3.2 billion for 2013 - our
third-highest total on record

Earnings guidance of $0.30-$0.35 per share for first-quarter 2014;
$1.40-$1.80 per share for the year

SASKATOON, Jan. 30, 2014 /CNW/ - Potash Corporation of Saskatchewan Inc.
(PotashCorp) today reported fourth-quarter earnings of $0.26 per share
($230 million), a total which included a $60 million charge
(approximately $0.05 per share) for severance-related costs associated
with workforce reductions announced in December. This result was below
the $0.48 per share ($421 million) reported during the same period in
2012. Earnings for the year totaled $2.04 per share, compared to $2.37
per share in 2012.

Challenging fertilizer market conditions impacted our performance. Gross
margins fell as lower prices in all three nutrients more than offset
improved costs and higher sales volumes. Total gross margin for both
the quarter ($460 million) and the year ($2.8 billion) fell below 2012
same-period results of $586 million and $3.4 billion, respectively.

Fourth-quarter earnings before finance costs, income taxes, depreciation
and amortization2 (EBITDA) of $544 million brought our total for the year to $3.3
billion. The company generated $656 million in cash from operating
activities during the fourth quarter, bringing our full-year result to
$3.2 billion, slightly below the record achieved in 2012.

Earnings from our offshore investments were similarly affected by
fertilizer market conditions. For the quarter, contributions from our
investments in Arab Potash Company Ltd. (APC) in Jordan, Israel
Chemicals Ltd. (ICL) in Israel and Sociedad Quimica y Minera de Chile
S.A. (SQM) in Chile added $25 million to earnings. Total contributions
for the year, including a dividend from Sinofert Holdings Limited
(Sinofert) in China, were $276 million. Both totals trailed those of
the previous year. The market value of our investments in these
publicly traded companies was approximately $5.2 billion, or $6 per
share, at market close on January 29, 2014.

"This past quarter was a difficult one," said PotashCorp President and
Chief Executive Officer Bill Doyle. "Pricing headwinds - most notably
in potash - weighed on our performance, although there were signs as
the quarter came to a close that the uncertainty in global markets was
beginning to abate. Our focus remained on those things we can influence
and we took important steps to enhance our competitive position across
all three nutrients and prepare the company to deliver better
performance."

Market Conditions

Following a period of limited purchasing activity, potash demand
improved during the fourth quarter of 2013. This was most notable in
North America where favorable crop economics and the need to replenish
soil nutrients after a record harvest led to robust demand as farmers
sought to meet their fall application needs. Shipments from North
American producers climbed 30 percent above the same period in 2012 -
totaling 2.3 million tonnes, which nearly surpassed the fourth-quarter
record.

Offshore potash shipments from North American producers improved sharply
during the quarter (up 38 percent) compared to the same period in 2012,
when demand was especially weak. While buyers continued to move
cautiously in an uncertain pricing environment, strong seasonal demand
resulted in greater purchasing activity in spot markets like Brazil and
Southeast Asia. Conversely, shipments to key contract markets continued
to be limited, although totals for the most recent quarter included
movements to India (none in 2012's similar period). Increased supply
capability combined with relatively constrained demand resulted in
continued price erosion through the last three months of 2013.

In nitrogen, ammonia prices were relatively stable through much of the
second half of the year, although well below the comparative period of
2012 due to increased supply availability from key exporting regions
and higher US production. After weakening through much of the year,
urea markets began to show improvement near the end of the fourth
quarter as stronger demand, limited import activity and perceived
product shortages pushed up key benchmark prices.

Rising export capability and weak Indian imports affected global
phosphate markets for most of 2013. In North America, fourth-quarter
shipments from domestic producers slowed as dealers drew down
inventories to help meet fall fertilizer application requirements. This
slowdown was partially offset by strong demand in Latin America and
certain Southeast Asian countries, which was reflected in increased
exports by US producers during the fourth quarter. Although markets
started to strengthen as the year came to a close, prices for all
phosphate products trailed those during the same period in 2012.

Potash

A challenging pricing environment - particularly during the second half
of the year - led to weaker results in our potash segment in 2013.
Gross margin for the quarter ($228 million) and year ($1.6 billion)
trailed the comparative totals in 2012 ($281 million and $2.0 billion,
respectively).

Fourth-quarter potash sales volumes surpassed the trailing quarter (up
13 percent) and the comparative period of 2012 (up 34 percent). This
rebound was most pronounced in North America, as our sales volumes to
this market reached 0.8 million tonnes, outpacing the 0.6 million
tonnes sold during the same period of 2012. Our offshore sales volumes
of 0.9 million tonnes for the fourth quarter were above the
historically low 0.7 million tonnes sold during the same period in
2012. The majority of Canpotex3 shipments were to Latin America (29 percent) and Other Asia (41
percent), with those to India (17 percent) and spot vessels to China (6
percent) accounting for a smaller percentage. PotashCorp's annual sales
volumes reached 8.1 million tonnes, exceeding the 7.2 million tonnes
shipped during full-year 2012. This reflected an overall improvement in
global volumes.

Competitive pressures weighed on all potash markets and led to lower
average realized prices for the fourth quarter ($282 per tonne) and
full year ($332 per tonne) relative to the same periods in 2012.

Our per-tonne costs of goods sold, including $32 million in
severance-related costs, improved from last year's fourth quarter
primarily due to higher production levels, a declining Canadian dollar
and the absence of higher-cost Esterhazy tonnes.

Nitrogen

Fourth-quarter nitrogen gross margin totaled $188 million - compared to
$206 million generated during the same period in 2012 - as the positive
impact of increased sales volumes was more than offset by lower average
realized prices. For the year, gross margin reached $913 million, 7
percent below the record achieved in 2012. Favorable natural gas costs
and higher production levels resulted in our US operations generating
$126 million of gross margin for the quarter, while Trinidad
contributed $62 million.

Our fourth-quarter sales volumes of 1.5 million tonnes exceeded the 1.1
million tonnes sold during the same period of 2012 as we benefited from
expanded capacity. Sales volumes for the year reached 5.9 million
tonnes, 19 percent higher than in 2012, primarily reflecting additional
tonnage from our Geismar facility.

Our average realized price for the fourth quarter was $326 per tonne,
well below the $461 per tonne in 2012's comparable period. Prices for
all three major product categories declined from the historically high
levels of 2012.

The total average cost of natural gas used in production for the fourth
quarter, including the impact of our hedged position, was $4.83 per
MMBtu, 31 percent below the same period in 2012. This, plus the
favorable impact of additional lower-cost production from Geismar,
resulted in a 29 percent reduction in per-tonne cost of goods sold for
the quarter.

Phosphate

Our fourth-quarter phosphate gross margin totaled $44 million, produced
almost entirely by our feed and industrial businesses. This result was
well below the $99 million earned during the same period in 2012 as
difficult global phosphate fertilizer market conditions persisted.
Additionally, the fourth-quarter 2013 total included $17 million in
severance-related costs and $14 million in other non-cash charges, both
of which were included in cost of goods sold. For the year, phosphate
gross margin totaled $304 million, significantly below the $469 million
earned in 2012.

For the fourth quarter, our average realized price of $455 per tonne
trailed the $577 per tonne realized in the same period in 2012.
Fertilizer products experienced the largest decline, with average
realized prices down by 28 percent, while prices for our more stable
feed and industrial products were down 8 percent.

Higher production levels and lower input costs for sulfur and ammonia
were the key contributors to our improved per-tonne cost of goods sold
in phosphate (down 13 percent compared to fourth-quarter 2012).

Financial

Provincial mining and other taxes totaled $40 million (compared to $18
million in fourth-quarter 2012), largely due to the timing of annual
potash production tax accruals.

Capital-related cash expenditures totaled $0.4 billion during the
quarter, bringing our annual total to $1.6 billion. At the close of
2013, our estimated expenditures relating to our multi-year potash
expansion program were 93 percent complete.

Through our announced share repurchase program, we repurchased a total
of 7.8 million common shares during the fourth quarter. At the close of
2013, we had completed approximately 33 percent of the anticipated
total buyback under the program at an average cost of $31.46 per share.

Market Outlook

Even as 2014 begins with a more tempered outlook for crop commodity
prices, we believe the fundamental drivers of fertilizer demand remain
supportive. Record crop production in 2013 has led to a significant
agronomic need to replenish essential soil nutrients. We expect
farmers, especially those in more developed agricultural economies,
will strive to increase their soil productivity in order to maximize
returns from each planted acre.

In potash, the uncertainty that persisted over the past six months
appears to be subsiding and we expect global demand to improve. We
enter 2014 with improved market engagement and believe global shipments
for the year could be in the range of 55-57 million tonnes (an increase
of approximately 5 percent from 2013 levels), with those during the
first half expected to be particularly robust. Although we believe
conditions are supportive for record potash demand, achieving such
levels will largely depend on consistent buyer engagement and renewed
commitment in key developing agricultural economies to address
nutrient-deficient soils.

In North America, we expect potash demand to be strong entering the
planting season as supportive economics and the need to replenish soil
nutrients should increase requirements at the farm level. We have seen
this play out in recent weeks as dealers with limited inventories seek
to ensure tonnage is in place prior to the spring. We anticipate
shipments through the first half of 2014 will outpace those during the
same period last year.

In China, we believe improved product affordability and a desire to
increase domestic food production to help counterbalance rising grain
imports will motivate consumption growth. We expect this to result in
annual potash imports slightly above 2013 levels. First-half contracts
with major offshore suppliers - including Canpotex - will likely meet a
significant portion of China's anticipated annual seaborne
requirements.

In India, potash shipments against previously contracted tonnage
(through the end of March 2014) continue at revised pricing terms more
reflective of current market conditions. We believe that India's potash
requirements will improve after a prolonged period of deferral,
although we do not expect a significant consumption response in 2014
without changes to the existing fertilizer subsidy program.

Buyers in key offshore spot markets in Latin America and other Asian
countries continue to be active. We see positive signs that potash
demand will remain at elevated levels in response to agronomic needs
and favorable economic conditions. As a result, we anticipate shipments
to these regions will meet or surpass previous-year levels.

Based on our expectation of improved demand and reduced operational
capability (resulting largely from our operational and workforce
changes announced in December), we believe industry operating rates
will rise from 2013 levels (approximately 81 percent) and could be in
the range of 86 percent to 89 percent, contributing to a more stable
global potash market.

Financial Outlook

Even as near-term pressure on potash prices appears to have subsided,
its impact is expected to suppress our offshore realizations through
the early part of 2014. In North America, new pricing levels of $350
per short ton ($385 per metric tonne) announced with our winter-fill
sales program will result in a lower realized price than during
fourth-quarter 2013.

We expect our 2014 potash sales volumes to approximate 8.2-8.6 million
tonnes. While this estimate assumes a benefit from higher anticipated
global shipments, it will be partially offset by reduced sales from our
New Brunswick facility (the result of a temporary reduction in
operational capability) and a slightly lower Canpotex allocation for
the first half of 2014 compared to the close of 2013 (due to a
competitor's recent expansion run).

We believe we are well positioned to achieve our potash cost reduction
targets of $15-$20 per tonne from 2013 levels as we maximize production
at our lowest cost facilities. For 2014, our total will include an
estimated $16 million increase in non-cash costs due to accelerated
depreciation at our Penobsquis mine in New Brunswick along with
transition costs of approximately $54 million related to the ramp-up at
Picadilly and Rocanville. Total operational capability for 2014 is
estimated at approximately 9.0 million tonnes with an ability to draw
on inventory should customer demand surpass our current expectations.
Our plans include a Canpotex allocation run at Allan, which should
raise our entitlement for the second half of 2014 from the current
level of approximately 49 percent.

In nitrogen, producers in North America and Trinidad continue to benefit
from lower-cost natural gas relative to key exporting regions in China,
Western Europe and Ukraine. Although recent pricing increases for urea
and nitrogen solutions have improved the near-term outlook in nitrogen,
we expect typical seasonal trends and weaker ammonia prices to result
in margins trailing those of recent years. With a full year of
production from Geismar, combined with the expectation of reduced
natural gas curtailments at our operations in Trinidad, we expect our
sales volumes to exceed 2013 levels.

In phosphate, fundamentals in the fertilizer business have improved in
early 2014 but continued strength will largely depend on consistent
engagement in key consuming markets, particularly India. We expect
margins, especially for industrial and feed products, to remain
relatively stable compared to 2013 levels as improved efficiencies and
a shift to a more favorable product mix help counter potential pricing
weakness. While the closure of one of our chemical plants at White
Springs during the second half of 2014 will lower production slightly,
the timing of the curtailment is unlikely to result in significant lost
sales volumes for the year. Our non-cash costs will be elevated in
2014 (estimated at $43 million) as we accelerate depreciation on assets
impacted by our previously announced operational changes.

Based on these factors, PotashCorp forecasts first-quarter 2014 net
income per share in the range of $0.30-$0.35 for the first quarter of
2014 and between $1.40 and $1.80 per share for full-year 2014. Other
annual guidance numbers are provided in the table below:

Guidance Summary

Quarterly: Q1 2014

Earnings per share

$0.30-$0.35

Annual: 2014

Potash sales volumes

8.2-8.6 million tonnes

Potash gross margin

$1.0-$1.3 billion

Nitrogen and phosphate gross margin

$1.0-$1.2 billion

Capital expenditures

~$1.1 billion

Effective tax rate

26-28 percent

Provincial mining and other taxes*

16-18 percent

Selling and administrative expenses

$225-$235 million

Finance costs

$165-$175 million

Income from offshore investments**

$160-$180 million

Earnings per share

$1.40-$1.80

* As a percentage of potash gross margin
** Includes income from dividends and share of equity earnings

Conclusion

"While unexpected events and market uncertainty undermined confidence in
recent months, we are encouraged by the current trends in global
fertilizer markets," said Doyle. "There remains a tremendous nutrient
requirement in soils around the world and farmer economics continue to
be supportive to addressing this need. We are confident in our ability
to meet customers' requirements and remain focused on enhancing our
competitive position. As a company, we are committed to delivering
improved results to our stakeholders."

Notes

1. All references to per-share amounts pertain to diluted net income per
share.
2.See reconciliation and description of non-IFRS measures in the attached
section titled "Selected Non-IFRS Financial Measures and
Reconciliations."
3. Canpotex Limited (Canpotex), the offshore marketing company for
Saskatchewan potash producers.

PotashCorp is the world's largest crop nutrient company and plays an
integral role in global food production. The company produces the three
essential nutrients required to help farmers grow healthier, more
abundant crops. With global population rising and diets improving in
developing countries, these nutrients offer a responsible and practical
solution to meeting the long-term demand for food. PotashCorp is the
largest producer, by capacity, of potash and among the largest in
nitrogen and phosphate. While agriculture is its primary market, the
company also produces products for animal nutrition and industrial
uses. Common shares of Potash Corporation of Saskatchewan Inc. are
listed on the Toronto Stock Exchange and the New York Stock Exchange.

This release contains forward-looking statements or forward-looking
information (forward-looking statements). These statements can be
identified by expressions of belief, expectation or intention, as well
as those statements that are not historical fact. These statements are
based on certain factors and assumptions including with respect to:
foreign exchange rates, expected growth, results of operations,
performance, business prospects and opportunities and effective tax
rates. While the company considers these factors and assumptions to be
reasonable based on information currently available, they may prove to
be incorrect. Forward-looking statements are subject to risks and
uncertainties that are difficult to predict. The results or events set
forth in forward-looking statements may differ materially from actual
results or events. Several factors could cause actual results or events
to differ materially from those expressed in the forward-looking
statements, including, but not limited to the following: risk and
uncertainties related to operating and workforce changes made in
response to our industry and the markets we serve; variations from our
assumptions with respect to foreign exchange rates, expected growth,
results of operations, performance, business prospects and
opportunities, and effective tax rates; fluctuations in supply and
demand in the fertilizer, sulfur, transportation and petrochemical
markets; costs and availability of transportation and distribution for
our raw materials and products, including railcars and ocean freight;
changes in competitive pressures, including pricing pressures; adverse
or uncertain economic conditions and changes in credit and financial
markets; the results of sales contract negotiations within major
markets; economic and political uncertainty around the world; timing
and impact of capital expenditures; risks associated with natural gas
and other hedging activities; changes in capital markets; unexpected or
adverse weather conditions; changes in currency and exchange rates;
unexpected geological or environmental conditions, including water
inflows; imprecision in reserve estimates; adverse developments in new
and pending legal proceedings or government investigations;
acquisitions we may undertake; strikes or other forms of work stoppage
or slowdowns; rates of return on and the risks associated with our
investments; changes in, and the effects of, government policies and
regulations; security risks related to our information technology
systems; and earnings and the decisions of taxing authorities, which
could affect our effective tax rates. Additional risks and
uncertainties can be found in our Form 10-K for the fiscal year ended
December 31, 2012 under the captions "Forward-Looking Statements" and
"Item 1A - Risk Factors" and in our other filings with the US
Securities and Exchange Commission and the Canadian provincial
securities commissions. Forward-looking statements are given only as at
the date of this release and the company disclaims any obligation to
update or revise the forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.

PotashCorp will host a Conference Call on Thursday, January 30, 2014 at
1:00 pm Eastern Time.

Telephone Conference:

Dial-in numbers:

- From Canada and the US: 1-877-881-1303
- From Elsewhere: 1-412-902-6719

(3) Cash flow hedges are comprised of natural gas derivative instruments
and were net of income taxes of $NIL (2012 - $(4)) for the three months
ended December 31, 2013 and $NIL (2012 - $7) for the twelve months
ended December 31, 2013.

(4) Net of income taxes of $(4) (2012 - $(8)) for the three months ended
December 31, 2013 and $(18) (2012 - $(32)) for the twelve months ended
December 31, 2013.

(See Notes to the Condensed Consolidated Financial Statements)

Potash Corporation of Saskatchewan Inc.

Condensed Consolidated Statement of Changes in Equity

(in millions of US dollars)

(unaudited)

Accumulated Other Comprehensive Income

Net unrealized

Net

Net

Total

gain on

loss on

actuarial

Accumulated

available-

derivatives

gain

Other

Share

Contributed

for-sale

designated as

on defined

Comprehensive

Retained

Total

Capital

Surplus

investments

cash flow hedges

benefit plans(1)

Other

Income

Earnings

Equity

Balance - December 31, 2012

$

1,543

$

299

$

1,539

$

(138)

$

-

$

(2)

$

1,399

$

6,671

$

9,912

Net income

-

-

-

-

-

-

-

1,785

1,785

Other comprehensive (loss) income

-

-

(759)

33

164

-

(562)

-

(562)

Share repurchase (Note 3)

(25)

(82)

-

-

-

-

-

(338)

(445)

Dividends declared

-

-

-

-

-

-

-

(1,146)

(1,146)

Effect of share-based compensation

including issuance of common shares

52

2

-

-

-

-

-

-

54

Shares issued for dividend

reinvestment plan

30

-

-

-

-

-

-

-

30

Transfer of net actuarial gain on

defined benefit plans

-

-

-

-

(164)

-

(164)

164

-

Balance - December 31, 2013

$

1,600

$

219

$

780

$

(105)

$

-

$

(2)

$

673

$

7,136

$

9,628

(1) Any amounts incurred during a period were closed out to retained
earnings at each period-end. Therefore, no balance exists at the
beginning or end of period.

(See Notes to the Condensed Consolidated Financial Statements)

Potash Corporation of Saskatchewan Inc.

Condensed Consolidated Statements of Cash Flow

(in millions of US dollars)

(unaudited)

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Operating Activities

Net income

$

230

$

421

$

1,785

$

2,079

Adjustments to reconcile net income to cash provided by operating
activities

Potash Corporation of Saskatchewan Inc.Notes to the Condensed Consolidated Financial StatementsFor the Three and Twelve Months Ended December 31, 2013(in millions of US dollars except as otherwise noted) (unaudited)

1. Significant Accounting Policies

With its subsidiaries, Potash Corporation of Saskatchewan Inc. ("PCS") -
together known as "PotashCorp" or "the company" except to the extent
the context otherwise requires - forms an integrated fertilizer and
related industrial and feed products company. The company's accounting
policies are in accordance with International Financial Reporting
Standards, as issued by the International Accounting Standards Board
("IFRS"). The accounting policies used in preparing these unaudited
condensed consolidated financial statements are consistent with those
used in the preparation of the company's 2012 annual consolidated
financial statements except as described in Note 1 of the company's
2013 First Quarter Quarterly Report on Form 10-Q.

These unaudited condensed consolidated financial statements include the
accounts of PCS and its subsidiaries; however, they do not include all
disclosures normally provided in annual consolidated financial
statements and should be read in conjunction with the company's 2012
annual consolidated financial statements. The company's 2013 annual
consolidated financial statements will include additional information
under IFRS in its Annual Integrated Report in February 2014.

In management's opinion, the unaudited condensed consolidated financial
statements include all adjustments necessary to present fairly such
information.

2. Long-Term Debt

During the first quarter of 2013, the company fully repaid $250 of 4.875
percent 10-year senior notes at maturity. During the second quarter of
2013, the company classified as current the $500 aggregate principal
amount of 5.250 percent senior notes due May 15, 2014.

3. Share Capital

On July 24, 2013, the company's Board of Directors authorized a share
repurchase program of up to $2,000 of PotashCorp's outstanding common
shares (5 percent of its outstanding common shares) through a normal
course issuer bid. Shares may be repurchased from time to time on the
open market commencing August 2, 2013 through August 1, 2014 at
prevailing market prices. The timing and amount of purchases under the
program are dependent upon the availability and alternate uses of
capital, market conditions, applicable US and Canadian regulations and
other factors.

Under this program, the company had repurchased for cancellation
7,845,100 common shares during the three months ended December 31,
2013, at a cost of $250 and an average price per share of $31.86. The
repurchase resulted in a reduction of share capital of $14, and the
excess of net cost over the average book value of the shares was
recorded as a reduction of contributed surplus of $3 and a reduction of
retained earnings of $233. During the twelve months ended December 31,
2013, a total of 14,145,100 common shares were repurchased at a cost of
$445 and an average price per share of $31.46, resulting in a reduction
of share capital of $25, a reduction of contributed surplus of $82 and
a reduction of retained earnings of $338.

4. Segment Information

The company has three reportable operating segments: potash, nitrogen
and phosphate. Inter-segment sales are made under terms that
approximate market value. The accounting policies of the segments are
the same as those described in Note 1.

Three Months Ended December 31, 2013

Potash

Nitrogen

Phosphate

All Others

Consolidated

Sales - third party

$

564

$

494

$

483

$

-

$

1,541

Freight, transportation and distribution - third party

(60)

(23)

(54)

-

(137)

Net sales - third party

504

471

429

-

Cost of goods sold - third party

(276)

(298)

(370)

-

(944)

Margin (cost) on inter-segment sales

-

15

(15)

-

-

Gross margin

228

188

44

-

460

Depreciation and amortization

(52)

(40)

(80)

(5)

(177)

Cash flows for additions to property, plant and equipment

279

72

60

3

414

Three Months Ended December 31, 2012

Potash

Nitrogen

Phosphate

All Others

Consolidated

Sales - third party

$

554

$

546

$

542

$

-

$

1,642

Freight, transportation and distribution - third party

(41)

(21)

(51)

-

(113)

Net sales - third party

513

525

491

-

Cost of goods sold - third party

(232)

(334)

(377)

-

(943)

Margin (cost) on inter-segment sales

-

15

(15)

-

-

Gross margin

281

206

99

-

586

Depreciation and amortization

(34)

(35)

(73)

(2)

(144)

Cash flows for additions to property, plant and equipment

395

118

73

42

628

Twelve Months Ended December 31, 2013

Potash

Nitrogen

Phosphate

All Others

Consolidated

Sales - third party

$

2,963

$

2,275

$

2,067

$

-

$

7,305

Freight, transportation and distribution - third party

(256)

(101)

(215)

-

(572)

Net sales - third party

2,707

2,174

1,852

-

Cost of goods sold - third party

(1,134)

(1,316)

(1,493)

-

(3,943)

Margin (cost) on inter-segment sales

-

55

(55)

-

-

Gross margin

1,573

913

304

-

2,790

Depreciation and amortization

(196)

(161)

(294)

(15)

(666)

Cash flows for additions to property, plant and equipment

1,151

184

238

51

1,624

Twelve Months Ended December 31, 2012

Potash

Nitrogen

Phosphate

All Others

Consolidated

Sales - third party

$

3,285

$

2,350

$

2,292

$

-

$

7,927

Freight, transportation and distribution - third party

(206)

(97)

(191)

-

(494)

Net sales - third party

3,079

2,253

2,101

-

Cost of goods sold - third party

(1,116)

(1,341)

(1,566)

-

(4,023)

Margin (cost) on inter-segment sales

-

66

(66)

-

-

Gross margin

1,963

978

469

-

3,410

Depreciation and amortization

(169)

(138)

(261)

(10)

(578)

Cash flows for additions to property, plant and equipment

1,424

379

245

85

2,133

5. Income Taxes

A separate estimated average annual effective tax rate was determined
for each taxing jurisdiction and applied individually to the pre-tax
income of each jurisdiction.

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Income tax expense

$

100

$

113

$

687

$

826

Actual effective tax rate on ordinary earnings

25%

19%

26%

25%

Actual effective tax rate including discrete items

30%

21%

28%

28%

Discrete tax adjustments that impacted the tax rate

$

18

$

10

$

55

$

27

Significant items to note include the following:

• The actual effective tax rate on ordinary earnings for the fourth
quarter of 2013 increased compared to the same period last year due to
a different income weighting between jurisdictions.

• In 2013, a tax expense of $8 (recovery of $1 in the fourth quarter)
was recorded to adjust the 2012 income tax provision to the income tax
returns filed for that year.

• In fourth-quarter 2013, a net tax expense of $13 was recorded to
adjust the deferred tax asset related to foreign tax loss carryforwards
to the amount expected to be realized upon utilization.

• In fourth-quarter 2013, a deferred tax expense of $10 was recorded as
a result of a planned distribution of earnings from a foreign
jurisdiction.

• In second-quarter 2013, a deferred tax expense of $11 was recorded as
a result of a Canadian income tax rate increase.

• In 2012, a tax expense of $17 ($NIL in the fourth quarter) was
recorded to adjust the 2011 income tax provision to the income tax
returns filed for that year.

• In second-quarter 2012, a non-tax deductible impairment of the
company's available-for-sale investment in Sinofert Holdings Limited
was recorded. This increased the 2012 actual effective tax rate
including discrete items by 3 percent for the year.

6. Net Income Per Share

Net income per share was calculated on the following weighted average
number of shares:

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Basic

861,331,000

862,757,000

864,596,000

860,033,000

Diluted

868,015,000

875,959,000

873,982,000

875,907,000

Diluted net income per share was calculated based on the weighted
average number of shares issued and outstanding during the period,
incorporating the following adjustments. The denominator was: (1)
increased by the total of the additional common shares that would have
been issued assuming exercise of all stock options with exercise prices
at or below the average market price for the period; and (2) decreased
by the number of shares that the company could have repurchased if it
had used the assumed proceeds from the exercise of stock options to
repurchase them on the open market at the average share price for the
period. For performance-based stock option plans, the number of
contingently issuable common shares included in the calculation was
based on the number of shares, if any, that would be issuable if the
end of the reporting period were the end of the performance period and
the effect were dilutive.

7. Operating and Workforce Changes

The company implemented operating and workforce changes in the US,
Canada and Trinidad which resulted in the following for the year ending
December 31, 2013:

• Termination benefit costs of $60 and a provision of $56 at December
31, 2013. The provision is expected to be settled in 2014.

• Curtailment gainsof $11 in the company's US defined benefit plans due to significant
reductions in plan participants.

Potash Corporation of Saskatchewan Inc.

Selected Financial Data

(unaudited)

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Potash Sales (tonnes - thousands)

Manufactured Product

North America

836

588

3,185

2,590

Offshore

929

729

4,915

4,640

Manufactured Product

1,765

1,317

8,100

7,230

Potash Net Sales

(US $ millions)

Sales

$

564

$

$ 554

$

$ 2,963

$

3,285

Freight, transportation and distribution

(60)

(41)

(256)

(206)

Net Sales

$

504

$

$ 513

$

$ 2,707

$

3,079

Manufactured Product

North America

$

287

$

263

$

1,210

$

1,231

Offshore

211

247

1,482

1,835

Other miscellaneous and purchased product

6

3

15

13

Net Sales

$

504

$

513

$

2,707

$

3,079

Manufactured Product

Average Realized Sales Price per MT

North America

$

343

$

447

$

380

$

475

Offshore

$

227

$

339

$

302

$

396

Average

$

282

$

387

$

332

$

424

Cost of Goods Sold per MT

$

(150)

$

(172)

$

(136)

$

(152)

Gross Margin per MT

$

132

$

215

$

196

$

272

Potash Corporation of Saskatchewan Inc.

Selected Financial Data

(unaudited)

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Average Natural Gas Cost in Production per MMBtu

$

4.83

$

7.01

$

5.38

$

5.91

Nitrogen Sales (tonnes - thousands)

Manufactured Product

Ammonia (1)

543

425

2,163

2,033

Urea

270

235

1,070

1,105

Solutions/Nitric acid/Ammonium nitrate

685

437

2,663

1,808

Manufactured Product

1,498

1,097

5,896

4,946

Fertilizer sales tonnes (1)

472

304

1,833

1,521

Industrial/Feed sales tonnes

1,026

793

4,063

3,425

Manufactured Product

1,498

1,097

5,896

4,946

Nitrogen Net Sales

(US $ millions)

Sales (2, 3)

$

523

$

590

$

2,417

$

2,503

Freight, transportation and distribution

(24)

(21)

(104)

(97)

Net Sales

$

499

$

569

$

2,313

$

2,406

Manufactured Product

Ammonia (2)

$

244

$

287

$

1,143

$

1,152

Urea

96

112

443

568

Solutions/Nitric acid/Ammonium nitrate

149

107

638

445

Other miscellaneous and purchased product (3)

10

63

89

241

Net Sales

$

499

$

$ 569

$

2,313

$

2,406

Fertilizer net sales (2)

$

156

$

142

$

722

$

738

Industrial/Feed net sales

333

364

1,502

1,427

Other miscellaneous and purchased product (3)

10

63

89

241

Net Sales

$

499

$

569

$

2,313

$

2,406

Manufactured Product

Average Realized Sales Price per MT

Ammonia

$

449

$

675

$

529

$

566

Urea

$

356

$

475

$

414

$

514

Solutions/Nitric acid/Ammonium nitrate

$

218

$

247

$

240

$

247

Average

$

326

$

461

$

377

$

438

Fertilizer average price per MT

$

331

$

467

$

396

$

485

Industrial/Feed average price per MT

$

325

$

458

$

370

$

417

Average

$

326

$

461

$

377

$

438

Cost of Goods Sold per MT

$

(204)

$

(288)

$

(225)

$

(254)

Gross Margin per MT

$

122

$

173

$

152

$

184

(1) Includes inter-segment ammonia sales (tonnes - thousands)

48

30

184

139

(2) Includes inter-segment ammonia net sales of

$

27

$

23

$

106

$

94

(3) Includes inter-segment other miscellaneous and purchased
product net sales of

$

1

$

21

$

33

$

59

Potash Corporation of Saskatchewan Inc.

Selected Financial Data

(unaudited)

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Phosphate Sales (tonnes - thousands)

Manufactured Product

Fertilizer

637

541

2,496

2,473

Feed and Industrial

297

297

1,184

1,170

Manufactured Product

934

838

3,680

3,643

Phosphate Net Sales

(US $ millions)

Sales

$

483

$

542

$

2,067

$

2,292

Freight, transportation and distribution

(54)

(51)

(215)

(191)

Net Sales

$

429

$

491

$

1,852

$

2,101

Manufactured Product

Fertilizer

$

244

$

287

$

1,079

$

1,291

Feed and Industrial

181

197

749

778

Other miscellaneous and purchased product

4

7

24

32

Net Sales

$

429

$

491

$

1,852

$

2,101

Manufactured Product

Average Realized Sales Price per MT

Fertilizer

$

383

$

529

$

433

$

522

Feed and Industrial

$

608

$

663

$

632

$

665

Average

$

455

$

577

$

497

$

568

Cost of Goods Sold per MT

$

(401)

$

(463)

$

(415)

$

(444)

Gross Margin per MT

$

54

$

114

$

82

$

124

Potash Corporation of Saskatchewan Inc.

Selected Additional Data

(unaudited)

Exchange Rate (Cdn$/US$)

2013

2012

December 31

1.0636

0.9949

Fourth-quarter average conversion rate

1.0399

0.9875

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Production

Potash production (KCl Tonnes - thousands)

1,940

1,763

7,792

7,724

Potash shutdown weeks (1)

10

22

42

77

Nitrogen production (N Tonnes - thousands)

798

573

2,952

2,602

Phosphate production (P2O5 Tonnes - thousands)

505

504

2,058

1,983

Phosphate P2O5 operating rate

85%

85%

87%

84%

Shareholders

PotashCorp's total shareholder return

6%

-6%

-16%

0%

Customers

Product tonnes involved in customer complaints (thousands)

27

10

43

64

Community

Taxes and royalties ($ millions) (2)

84

133

568

654

Employees

Annualized turnover rate (excluding retirements) (3)

7%

3%

5%

5%

Safety

Total site recordable injury rate (per 200,000 work hours) (4)

0.86

1.22

1.06

1.29

Environment

Environmental incidents (5)

4

1

17

19

December 31,

December 31,

As at

2013

2012

Number of employees

Potash

2,912

2,759

Nitrogen

789

788

Phosphate

1,637

1,792

Other

449

440

Total

5,787

5,779

(1)

Represents weeks of full production shutdown; excludes the impact of any
periods of reduced operating rates and planned routine annual
maintenance shutdowns.

The following information is included for convenience only. Generally, a
non-IFRS financial measure is a numerical measure of a company's
performance, financial position or cash flows that either excludes or
includes amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance with
IFRS. EBITDA, adjusted EBITDA, adjusted EBITDA margin, cash flow prior
to working capital changes and free cash flow are not measures of
financial performance (nor do they have standardized meanings) under
IFRS. In evaluating these measures, investors should consider that the
methodology applied in calculating such measures may differ among
companies and analysts.

The company uses both IFRS and certain non-IFRS measures to assess
performance. Management believes these non-IFRS measures provide useful
supplemental information to investors in order that they may evaluate
PotashCorp's financial performance using the same measures as
management. Management believes that, as a result, the investor is
afforded greater transparency in assessing the financial performance of
the company. These non-IFRS financial measures should not be considered
as a substitute for, nor superior to, measures of financial performance
prepared in accordance with IFRS.

A. EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

Set forth below is a reconciliation of "EBITDA" and "adjusted EBITDA" to
net income and "adjusted EBITDA margin" to net income as a percentage
of sales, the most directly comparable financial measures calculated
and presented in accordance with IFRS.

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Net income

$

230

$

421

$

1,785

$

2,079

Finance costs

37

25

144

114

Income taxes

100

113

687

826

Depreciation and amortization

177

144

666

578

EBITDA

$

544

$

703

$

3,282

$

3,597

Termination benefit costs

60

-

60

-

Impairment of available-for-sale investment

-

-

-

341

Adjusted EBITDA

$

604

$

703

$

3,342

$

3,938

EBITDA is calculated as net income before finance costs, income taxes
and depreciation and amortization. Adjusted EBITDA is calculated as net
income before finance costs, income taxes, depreciation and
amortization, termination benefit costs and certain impairment charges.
PotashCorp uses EBITDA and adjusted EBITDA as supplemental financial
measures of its operational performance. Management believes EBITDA and
adjusted EBITDA to be important measures as they exclude the effects of
items which primarily reflect the impact of long-term investment and
financing decisions, rather than the performance of the company's
day-to-day operations. As compared to net income according to IFRS,
these measures are limited in that they do not reflect the periodic
costs of certain capitalized tangible and intangible assets used in
generating revenues in the company's business, or the charges
associated with impairments. Management evaluates such items through
other financial measures such as capital expenditures and cash flow
provided by operating activities. The company believes that these
measurements are useful to measure a company's ability to service debt
and to meet other payment obligations or as a valuation measurement.

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Sales

$

1,541

$

1,642

$

7,305

$

7,927

Freight, transportation and distribution

(137)

(113)

(572)

(494)

Net sales

$

1,404

$

1,529

$

6,733

$

7,433

Net income as a percentage of sales

15%

26%

24%

26%

Adjusted EBITDA margin

43%

46%

50%

53%

Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net
sales (sales less freight, transportation and distribution). Management
believes comparing EBITDA to net sales earned (net of costs to deliver
product) is an important indicator of efficiency. In addition to the
limitations given above in using adjusted EBITDA as compared to net
income, adjusted EBITDA margin as compared to net income as a
percentage of sales is also limited in that freight, transportation and
distribution costs are incurred and valued independently of sales;
adjusted EBITDA also includes earnings from equity investees whose
sales are not included in consolidated sales. Management evaluates
these items individually on the consolidated statements of income.

Set forth below is a reconciliation of "cash flow prior to working
capital changes" and "free cash flow" to cash provided by operating
activities, the most directly comparable financial measure calculated
and presented in accordance with IFRS.

Three Months Ended

Twelve Months Ended

December 31

December 31

2013

2012

2013

2012

Cash flow prior to working capital changes

$

566

$

655

$

2,927

$

3,358

Changes in non-cash operating working capital

Receivables

114

272

276

188

Inventories

(1)

(70)

28

(7)

Prepaid expenses and other current assets

3

(11)

(1)

(32)

Payables and accrued charges

(26)

26

(18)

(282)

Changes in non-cash operating working capital

90

217

285

(133)

Cash provided by operating activities

$

656

$

872

$

3,212

$

3,225

Additions to property, plant and equipment

(414)

(628)

(1,624)

(2,133)

Other assets and intangible assets

8

(34)

-

(71)

Changes in non-cash operating working capital

(90)

(217)

(285)

133

Free cash flow

$

160

$

(7)

$

1,303

$

1,154

Management uses cash flow prior to working capital changes as a
supplemental financial measure in its evaluation of liquidity.
Management believes that adjusting principally for the swings in
non-cash working capital items due to seasonality or other timing
issues assists management in making long-term liquidity assessments.
The company also believes that this measurement is useful as a measure
of liquidity or as a valuation measurement.

The company uses free cash flow as a supplemental financial measure in
its evaluation of liquidity and financial strength. Management
believes that adjusting principally for the swings in non-cash
operating working capital items due to seasonality or other timing
issues, additions to property, plant and equipment, and changes to
other assets assists management in the long-term assessment of
liquidity and financial strength. Management also believes that this
measurement is useful as an indicator of its ability to service its
debt, meet other payment obligations and make strategic investments.
Readers should be aware that free cash flow does not represent residual
cash flow available for discretionary expenditures.